The long-awaited Warm Homes Plan has been published, and InstaGroup welcome that there is now a clear direction of travel.
These papers always leave questions but give commitment to a long-term direction and allow civil servants and policy makers to set out the detail in the coming months. We are seeking clarity on a number of areas and will communicate these as quickly and clearly as possible. However, a £15bn commitment to the warm homes scheme over 5 years is a really strong opportunity and whilst a world without obligation schemes will no doubt be different, there is plenty of opportunity for us all to prosper in a new era.
The general Government position is that technologies like solar PV, batteries & heat pumps offer a strong solution to reduce bills, however, the Government will also prioritise cost-effective fabric measures that offer strong value for money and which also compliment clean heating systems like heat pumps. This aligns well with our existing InstaGen range and our recent launch of the InstaGen Air Source Heat Pump, and InstaGroup are well positioned to help you transition towards these measures or support growth of these areas for you, wherever you are in your journey.
What is included in the new Warm Homes Scheme?
At a high level, the funding is broken down as follows:
- £5 bn – Low Income Schemes
- £2.7 bn – Boiler Upgrade Scheme
- £2 bn – Low-Cost Loans
- £1.1 bn – Heat Networks
- £2.7 bn – Innovation Finance
- £1.5bn – Other and proportional funding for devolved areas
Boiler Upgrade Scheme (BUS) has been extended to 2030 giving greater security to installers and providers a £7,500 grant for those upgrading to Heat Pumps from fossil fuel heating. The grant is applied for by the installer directly, and a lot of the complex rules around EPC requirements, and fabric upgrades (required at the residents’ cost) are being removed to make the scheme easier to access.
Low-Cost Loans is a completely new area which has very little detail at this point but will be a mechanism for the Government to provide interest free or low-interest loans to consumers who can afford repayments. This seems to be centred around Solar PV and battery storage, and should help support the able to pay market to grow.
Current Warm Homes Funding Opportunities
In the short term, the Low-Income Schemes bring the greatest clarity and opportunities. Both schemes within this – Warm Homes: Local Grant (WH:LG) and Warm Homes: Social Housing Fund (WH:SHF) – have been publicised for a while and both schemes are technically live, although each project is at various stages of procurement or mobilisation. Warm Homes: Local GrantWH:LG is awarded to Local Authorities to deliver, in which they vary from delivery in-house or some kind of delivery partner. The key is local though; councils are obligated to use local resources, so often you will have more success in opening these doors than us. We can then work with you to support those meetings and help give quality assurances to all parties. Please reach out to your account managers to discuss this further and access this support.
Warm Homes: Social Housing FundWH:SHF is a different structure entirely and has the lion’s share of the funding available. This is awarded to Social Housing Providers (SHP) and must be match-funded by them, so any figure you see published by Government of grant award can be doubled in the real-world delivery numbers. Most SHPs procure this work through their existing relationships with Main Contractors, who then sub-contract the works to specialist installers. There are still lots of opportunities as above, with direct works with SHPs that you have relationships with, and we can again support you with our experience of the sector and ongoing successful projects which can be leveraged to open doors with your connections.
InstaGroup’s Role in ECO and Warm Homes Funding
The National Housing Decarbonisation Group (NHDG) was founded in 2023 as a group of some of the largest-scale industry members involved in retrofit works, with the majority being large-scale Main Contractors targeting works under previous waves of social housing funding. As a founding member, InstaGroup helps represent the supply chain in these forums and gives us great experience of working with these contractors on WH:SHF. We mention this because there was some welcome news on pages 118 & 119 outlining supporting the transition of ECO installers across into WH:LG and WH:SHF. This included the intention to create a requirement to include ECO supply chain in their procurement, which will be overseen by a working group that will include the NHDG. This will help InstaGroup shape this policy and also get the clarity so desperately needed. We will do what we can to be a part of that working group or at least influence it as much as we can.
InstaGroup are uniquely positioned to be your partner through this transition period, we work best in collaboration and in partnership with yourselves and help each other to build a brighter future, together.
